A Troubled Pipeline.(International Edition)(natural-gas pipeline Nabucco)

Byline: Owen Matthews

Nabucco, the natural-gas pipeline running from Central Asia to Austria via the Balkans and Turkey, has run into trouble from an unexpected quarter. The European Union hopes Nabucco will help break its dependence on Russian gas. However, since the project's inception, there have been nagging doubts that Caspian Sea countries will be able to provide enough gas to fill the pipeline at its source. Azerbaijan already peddles most of its gas to Turkey, while other Central Asian countries have recently pledged to sell their reserves to Russia's Gazprom. To remedy that shortfall, a consortium of gas companies from Austria, Hungary and the United Arab Emirates recently struck an $8 billion deal with Iraq's Kurds to source gas from their region, run it into the pipeline via Turkey and thus solve Nabucco's supply problems.

The deal quickly drew criticism from Baghdad and Ankara, which have actively sought to block Kurdistan's oil ambitions over fears that independent energy revenue could help bolster the region's bid for political autonomy. Earlier this month the Iraqi government vetoed the Kurds' Nabucco arrangement, saying that the Kurdish regional government could not strike its own energy deals without violating Iraq's Constitution. Baghdad offered to supply Europe from another field ...